Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of introducing a one off windfall tax on energy companies.

The Energy Profits Levy was introduced in May 2022 to respond to very high prices that meant oil and gas companies are benefiting from exceptional profits. At Autumn Statement 2022, the government confirmed the rate of the levy would rise by a ten percentage points to 35%. This is on top of the 40% tax rate under the permanent regime, bringing the combined headline rate of tax for the sector to 75%, one of the highest amongst comparable North Sea regimes.

The Office for Budget Responsibility’s (OBR) forecast at Autumn Statement 2022 estimates revenues from EPL are expected to be £41.6 billion over the next five years. Total UK oil and gas revenues over this period are forecast to be around £80 billion.

At Autumn Statement, the Government also announced the Electricity Generator Levy, effective since 1 January 2023. This is a temporary 45% tax on extraordinary returns made by some UK electricity generators.